Price $123.54
Year Range $45.5 - $135.58
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Volume 250,590,000
Market Cap $2,901B
PE Ratio 68.96
Dividend Yield 0.03%
Industry Semiconductor

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App Downloads View All

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NVIDIA - AI Stock Analysis

Analysis generated July 22, 2024

NVIDIA Corporation (NASDAQ: NVDA) is a leading global provider of graphics processing units (GPUs), widely recognized for its advancements in artificial intelligence (AI) and high-performance computing. Originally known for pioneering the development of the GPU, NVIDIA has since expanded its technologies to serve various markets including gaming, professional visualization, data centers, and the automotive industry. The company's innovative GPU-accelerated computing capability provides cutting-edge solutions across various industries, making it a staple in the tech world.

Fundamental Analysis

In the latest quarter, NVIDIA’s revenue stood at $26 billion. This represents an impressive growth of 17.83% compared to the prior quarter, and a staggering year-over-year growth of 262.12%. Such figures underscore the company's robust market position and its ability to capitalize on evolving technological trends.

NVIDIA's net income for the last quarter was $14.9 billion, reflecting a quarter-over-quarter increase of 21.13% and a year-over-year growth of 628.39%. This meteoric rise in profitability highlights the effective management and significant demand for its products.

The EBITDA for the last quarter was $17.5 billion, representing an increase of 22.18% from the previous quarter and an astounding year-over-year rise of 611.97%. This reaffirms the company's operational efficiency and the strength of its core business segments.

However, NVIDIA's current P/E ratio is 68.96, which is notably high. This suggests potential overvaluation and signals caution for investors as it could indicate a bearish outlook. Additionally, the recent insider selling activity raises concerns about internal confidence in the stock's future performance.

Technical Analysis

Today's stock price for NVIDIA is $117.93, which marks a decrease of 6.83% from a month ago. This short-term decline may be worrisome for momentum traders. However, the stock has surged by 166.27% over the past year, reflecting positive long-term investor sentiment.

The trend appears bearish as indicated by the current SMA10 of 122.41, which is lower than the previous SMA10 of 123.54. This downward movement in the short-term moving average suggests potential continuing weakness in the stock price.

The RSI is at 53.3, which indicates a neutral condition. While neither overbought nor oversold, this suggests that the stock could move in either direction based on future market conditions.

Alternative Data Analysis

Examining NVIDIA's alternative data offers mixed signals. Job postings at NVIDIA have decreased to 1,050 open positions, down by 36% in the last couple of months. This could signify a cost-cutting measure or signal attempts to improve margins, which may hinder growth.

Conversely, NVIDIA has garnered an estimated 63 million visitors to their webpage, up by 19% over the past few months, indicating a bullish trend in potential customer acquisitions. However, the number of users downloading their mobile apps has dropped by 20%, with 9,000 daily downloads, suggesting possible customer engagement issues.

Social media engagement remains stable, with 2.2 million followers on both Instagram and Twitter showing no significant change. Stability in customer engagement on social media can reflect consistent brand loyalty.

According to AltIndex's AI, which integrates fundamental, technical, and alternative data, NVIDIA has an AI score of 63, which is a buy signal. This implies some degree of confidence in the stock's future performance.

Conclusion and Recommendation

In conclusion, NVIDIA presents an intriguing investment opportunity characterized by impressive revenue and profit growth alongside operational efficiency. However, the high P/E ratio and recent insider sales suggest caution. Technical indicators, though showing a recent decline, highlight strong long-term performance. Despite some negative trends in job postings and mobile app downloads, the increased web traffic supports a bullish outlook on customer acquisition.

Given the AltIndex AI score of 63, which signals a buy, coupled with strong long-term fundamentals, it may be recommended to maintain a cautiously optimistic stance. Investors might consider accumulating NVIDIA shares on dips, keeping a close watch on upcoming earnings reports and broader market conditions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.

The analytics provided are estimates and not a substitute for professional advice. All investments involve risks, including possible capital loss.
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